Although this ruling specifically involves a 2008 FCC sanction against Comcast (CMCSA), the nation's largest cable company, the decision effectively sets a precedent that severely limits the FCC's power to regulate broadband providers' "network management" practices.

The ruling immediately undercuts the FCC's ability to move ahead with a new net neutrality rulemaking process, and it moves the focus of the net neutrality battle to Congress. Net neutrality advocates have long said if they lost this court case, they would move to have the principles enshrined by law.

A Failed Assertion of Authority

Those principles hold that net neutrality should require Internet providers to treat all legal Web traffic equally and not discriminate against content that originates with a provider's rivals.

However, the court ruled that "The commission has failed to tie its assertion of ancillary authority over Comcast's Internet service to any statutorily mandated responsibility."

The decision is a major -- if somewhat symbolic -- victory for Comcast, which voluntarily has said it will abide by net neutrality. This case came about after the FCC ruled that Comcast violated the principle by interfering with Bit Torrent file-sharing traffic on its network. The cable giant appealed, arguing that the FCC lacked the power to enforce its previous net neutrality rules.

In 2008, the FCC had sanctioned Comcast after finding the cable giant violated the agency's 2005 Internet Policy Statement, which enumerated four principles designed to "encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet."

Consumers are entitled to access the lawful Internet content of their choice.

Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.

Consumers are entitled to connect their choice of legal devices that do not harm the network.

Consumers are entitled to competition among network providers, application and service providers, and content providers.

Vindicated, for Now

"In order to enforce something, an agency must be enforcing a rule that has force of law," Comcast spokesperson Sena Fitzmaurice said when the company's appeal was filed.

On Tuesday, Comcast was vindicated. But the larger battle is sure to continue.